SK Hynix Shares Drop Up to 10 Percent in Seoul Days After Nasdaq Debut

Three days after SK Hynix's depositary receipts surged more than ten percent in their Nasdaq debut, shares of the South Korean memory chipmaker reversed sharply lower. On Monday, the stock fell as much as 10 percent on the Seoul exchange, a move analysts attributed partly to profit-taking and partly to growing unease over the company's second-quarter results.

Retreat After Euphoria

Friday's Nasdaq debut was one of the largest foreign listings in the exchange's history. SK Hynix sold American depositary receipts (ADRs) at $149 apiece, and on the first day of trading the price opened 14 percent higher and closed the session up 12.8 percent. Investor enthusiasm was fueled by confidence that demand for HBM memory used in AI accelerators would keep growing for years.

By Monday, sentiment had reversed. Shares of the company in Seoul, where SK Hynix remains listed in parallel on its home exchange, fell as much as 10 percent during the day, after morning trading saw a decline of as much as 4.4 percent. It marked one of the stock's steepest single-day drops since the tech sector sell-off in June.

Two Listings, One Company

The situation in which the same company is valued differently on two exchanges has become a central topic among investors tracking the memory market. The Nasdaq listing was meant to narrow the so-called Korea discount, the persistent valuation gap between South Korean companies and their global peers, driven largely by limited share access for foreign funds.

We see room for that gap to narrow through the ADR listing, though we don't expect the Korea discount to disappear entirely - Rolf Bulk, head of semiconductors and infrastructure at Futurum Group

According to HSBC analysts, SK Hynix's valuation gap versus its American rival Micron ran into the tens of percent before the debut, even though the Korean company holds a stronger position in the AI memory market. The bank estimates that the Nasdaq listing could eventually lift SK Hynix's valuation by as much as 20 percent.

Concerns Over Q2 and HBM4

Monday's sell-off is being attributed not only to profit-taking after a successful debut but also to growing doubts about the company's second-quarter results. Investors had been counting on a sharp increase in shipments of the latest HBM4 chips, but the scale of that increase has come in smaller than expected.

Investors were taking profits after the U.S. listing concluded, while concerns also emerged over SK Hynix's second-quarter results - Ryu Young-ho, senior analyst at NH Investment & Securities

An additional factor is the company's revenue mix. SK Hynix is more heavily dependent on the HBM segment than Samsung or Micron, meaning it benefits less from recent price increases in conventional DRAM chips, gains that competitors with more diversified memory offerings have been capturing.

What It Means for the Memory Market

SK Hynix's Nasdaq debut was closely watched by other Asian tech companies as a possible template for their own ADR listings. Monday's sell-off, however, shows that even with strong structural demand for AI memory, the market can quickly reassess valuations shaped by the euphoria of a first trading day.

For Polish investors and tech firms relying on HBM memory for AI infrastructure, the swings in SK Hynix's valuation are a reminder that memory prices, which have set records in recent months, remain a volatile cost factor in building data centers. Analysts stress, however, that the share-price drop alone does not change the long-term outlook for AI-related memory demand, and they describe the sell-off as most likely temporary.

Sources: SK Hynix shares fall after stellar Nasdaq debut (cnbc.com), SK Hynix shares fall as much as 4.4% in Seoul after strong Nasdaq debut (finance.yahoo.com)